American Family Mut. Ins. Co. v. Grant

• Decision Date: 08 October 2009
• Docket Number: No. 1 CA-SA 09-0145.,1 CA-SA 09-0145.
• Citation: 217 P.3d 1212,222 Ariz. 507
• Parties: AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Petitioner, v. The Honorable Larry GRANT, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, Lauren Allo, Real Party in Interest.
• Court: Arizona Court of Appeals

217 P.3d 1212

222 Ariz. 507

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Petitioner, v. The Honorable Larry GRANT, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge Lauren Allo, Real Party in Interest.

No. 1 CA-SA 09-0145.

Court of Appeals of Arizona, Division 1, Department E.

October 8, 2009.

Allen & Lewis P.L.C. by Lynn M. Allen, Bryan M. Folger, Christopher A. Treadway, Phoenix, Attorneys for Petitioner.

Gallagher & Kennedy P.A. by Robert W. Boatman, C. Lincoln Combs, Phoenix, Attorneys for Real Party in Interest.

OPINION

DOWNIE, Judge.

¶ 1 This case presents issues of first impression regarding the proper scope of discovery into an expert witness's purported bias. American Family Mutual Insurance Company ("American Family") seeks special action review of the superior court's order granting real party in interest Lauren Allo's motion to compel and denying American Family's motion to quash a subpoena duces tecum issued to an expert witness. For the following reasons, we accept jurisdiction, grant relief, and remand for further proceedings in the superior court.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 Allo was involved in an automobile accident with Ariel Hickman on September 20, 2005. She sought medical treatment for knee, elbow, and back pain. In December 2005, Allo had arthroscopic surgery on her left knee. She underwent physical therapy and obtained additional medical care in 2006 and 2007.

¶ 3 Hickman's insurance company tendered its policy limits of $15,000 to Allo. American Family, Allo's insurer, paid Allo $5000 under the medical expense coverage portion of its policy. Allo later submitted an underinsured motorist ("UIM") claim to American Family. She stated that she had incurred roughly $26,000 in medical expenses and $3500 in lost wages and that she continued to have problems arising from accident-related injuries.

¶ 4 American Family's internal evaluations of Allo's UIM claim suggested that the knee surgery and ongoing treatment were due to her weight, past injuries, and arthritis — not the automobile accident with Hickman. American Family retained orthopedic surgeon Jon Zoltan, M.D., to review Allo's claim. Dr. Zoltan determined that Allo had preexisting degenerative joint disease, had sustained prior accident injuries, and had undergone previous surgery on her left knee. Dr. Zoltan opined that Allo's arthroscopic surgery and ongoing treatment were not necessitated by the accident with Hickman.

¶ 5 American Family concluded that the $20,000 Allo had already received was sufficient compensation for her accident-related injuries and therefore denied her UIM claim. In 2008, Allo sued American Family. She alleged that the insurer: (1) breached the terms of the insurance contract by denying UIM benefits; and (2) acted in bad faith by, inter alia, retaining Dr. Zoltan to evaluate her claim. Allo claimed American Family knew Dr. Zoltan was biased against personal injury plaintiffs and that he would render opinions adverse to her interests.

¶ 6 During discovery, Allo issued a subpoena duces tecum ("subpoena") to Dr. Zoltan, demanding that he produce extensive documentation. Dr. Zoltan objected to substantial portions of the subpoena, and Allo filed a motion to compel. American Family moved to quash the subpoena and also sought a protective order. Specifically, American Family objected to the following paragraphs of the subpoena:¹

3. A copy of any and all reports and/or opinion letters prepared by you for any attorney at the Lewis & Allen Law Firm during the last five years.²

4. A copy of any and all reports and/or opinion letters prepared by you for any attorney during the last three years.

5. A copy of any and all reports and/or opinion letters prepared by you for any insurance company during the last three years.

6. A copy of any deposition or trial testimony in your possession for testimony provided during the last five years.

7. A list of cases in which you have testified as an expert at trial or by deposition during the last five years, including the name of the case, the name of the attorney that retained you and the name of the attorney that represented the party whose litigation position was adverse to the person or entity that retained you.³

....

9. Financial information for years 2005present documenting the amount of income attributed to and/or received by you for: 1) expert witness consulting services; 2) consulting services to law firms; 3) physicians services or any other professional service provided by you on your own behalf, on behalf of TOCA or any other medical group. Documents requested in this paragraph could include, but are not limited to, personal tax returns, company tax returns, shareholder statements, accounting ledgers, 1099s or W-2s, and profit sharing documents identifying profit attributable to you and any profit sharing distributions made to you on account of this profit. Note: Plaintiff will sign an agreement to limit the use of these materials to litigation of this case and return or destroy all copies of these materials at the conclusion of this case.

10. Copies of any statements, forms or documents in your possession and control evidencing income earned by you from the Lewis & Allen Law Firm during years 2005 to the present.

11. Copies of any statements, forms or documents in your possession or control evidencing income earned by you from any of the following sources during years 2002 to the present:

a. any automobile insurance company;

b. any disability insurance carrier;

c. any workers' compensation insurance carrier; and

d. any law firm in defense of a personal injury, wrongful death or medical malpractice claim.

¶ 7 American Family contended that the subpoena to Dr. Zoltan was overbroad, unduly burdensome, and harassing.⁴ In defending the subpoena, Allo argued:

The core of Plaintiff's bad faith complaint is that American Family breached its duty to fairly evaluate the claim and give equal consideration to its insured by sending Ms. Allo to a biased, unfair physician for evaluation of her claim, rather than to an unbiased independent physician.

¶ 8 After oral argument, the superior court ordered Dr. Zoltan to produce: (1) copies of all medical review reports and independent medical examination ("IME") reports "provided to insurance companies or their attorneys" from 2000 to present; and (2) "the financial information requested regarding his total revenues from the insurance industry and their lawyers" from 2000 to present. The court also ruled that "Plaintiff's counsel is entitled to know what the fee was that the doctor received on the respective cases at issue" from 2000 to present. The court limited the required disclosures to "cases arising out of Arizona" and ordered that the information produced could not be disseminated beyond this case.⁵

DISCUSSION

1. Special Action Jurisdiction

¶ 9 The decision to accept or reject special action jurisdiction is highly discretionary. Ariz. Legislative Council v. Howe, 192 Ariz. 378, 382, ¶ 10, 965 P.2d 770, 774 (1998). A primary consideration is whether the petitioner has an equally plain, speedy and adequate remedy by appeal. State ex rel. Romley v. Superior Court, 172 Ariz. 109, 111, 834 P.2d 832, 834 (App.1992); Escalanti v. Superior Court, 165 Ariz. 385, 386, 799 P.2d 5, 6 (App.1990). Another relevant factor is whether the petition presents an issue of statewide importance affecting numerous cases. Lind v. Superior Court, 191 Ariz. 233, 236, ¶ 10, 954 P.2d 1058, 1061 (App. 1998).

¶ 10 Although appellate courts do not "routinely entertain petitions for extraordinary relief on discovery matters," special action jurisdiction may be appropriate because a discovery order is not immediately appealable. Green v. Nygaard, 213 Ariz. 460, 462, ¶ 6, 143 P.3d 393, 395 (App.2006) (finding special action jurisdiction appropriate "when the issue involves interpretation or application of civil procedure rules"). See also State Farm Mut. Auto. Ins. Co. v. Superior Court, 167 Ariz. 135, 804 P.2d 1323 (App.1991) (accepting special action jurisdiction in bad faith case to review trial court's grant of a motion to compel discovery). Because American Family has no adequate remedy by way of appeal, the question presented is likely to recur, and the matter is one of statewide importance about which superior court judges have disagreed, we accept special action jurisdiction.

2. Standard of Review

¶ 11 A trial court has broad discretion in resolving discovery disputes. Brown v. Superior Court, 137 Ariz. 327, 331, 670 P.2d 725, 729 (1983). Nevertheless, a court abuses its discretion when it commits an error of law in reaching its decision or the record fails to provide "substantial support" for the decision. State v. Cowles, 207 Ariz. 8, 9, ¶ 3, 82 P.3d 369, 370 (App.2004).

3. Discovery Regarding Witness Bias or Prejudice

¶ 12 Arizona Rule of Civil Procedure ("Rule") 26(b)(1)(A) allows parties to obtain discovery "regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action...." It is not a basis for objection "that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." Ariz. R. Civ. P. 26(b)(1)(A). A trial court may, however, "make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." Ariz. R. Civ. P. 26(c)(1).

¶ 13 Generally, litigants are entitled to present evidence that tends to show bias or prejudice on the part of witnesses, including those who testify as experts. Trial courts regularly instruct jurors to assess witnesses' credibility and to consider any "motive, bias, or prejudice." One such instruction reads In deciding the facts of this case, you should consider what testimony to accept, and what to...